After OPEC meeting in November 2016, the Crude rallied till December with price soaring to $55 per barrel. A very wild fall started late last month. A loss of $8 per barrel in less than a month, where does it go from here?. The following presents a technical perspective based on Crude Oil quarterly Elliott wave forecast.
15 March, AtoZForex - When Oil producers agreed to cut production in November 2016 meeting in Vienna, there were fresh optimism that price would rally to $60 in the first quarter of 2017. The bullish momentum which took price to $55 couldn't be sustained as price ranged between $50 and $55 in the first 6 weeks of 2017. Since then, price plummeted below $5o barrier and seems strong. The chart below viewed the long term prices of Crude oil and the expectations in the coming months.
Crude Oil quarterly Elliott wave forecast: long term forecast
Crude Oil Elliott wave analysis, weekly (click to zoom)
The chart above shows the Elliott wave analysis count since 2000. Prices of Oil rose sharply in the first 8 years of the new millennium. It was a clear impulse wave which was later followed by a fast sharp fall as economic crises rocked . The sharp fall followed by a long term rally and another fast fall. For another 8 years, the world saw a wild fall in the prices of Oil to almost the lowest price in 12 years. Elliott wave was able to cover this 16 years event and called it a CYCLE. A cycle of price waves that lasted 16 years could resume for another round of cycle?.
Late last year, the Oil producers held series of meetings to save prices from further fall after years of disagreement. Agreements were reached on 'papers' and price rallied from less than $48 to $55. From the projection above, prices may start another cyclic move initiated by a strong rally. With projections toward $100 per barrel. Could Oil ever reach $100 per barrel again? A similar question was asked before 2000. The charts say YES. We could see price rally toward the $100 mark in the coming years.
Crude Oil quarterly Elliott wave forecast: medium term forecast
What could happen in the coming months. A medium-term bias. The chart below gives a clue based on Elliott wave theory.
Crude Oil Elliott wave analysis, daily (click to zoom)
The chart above shows the rally from less than $30 in early 2016 is exhibiting the structural properties of a diagonal. The recent crash is probably the 4th wave of the diagonal. A rally upside could be seen in the coming weeks. Does that make the rally to resume fully?. Perhaps not. The diagonal only signals the first wave of the rally. A dip to $40 is still very likely in the second half of the year. By projection, a strong waves of bullish move could start in November/December 2018. It is also noted that often time, reversals in Oil occurs at the end of a year into the start of the following year just like we saw the 2016 rallies from less than $30.
Crude Oil quarterly Elliott wave forecast: swing analysis
The chart below shows the sub-waves of the emerging diagonal.
Crude Oil Elliott wave analysis, H4 (click to zoom)
A rally is very likely to spring from the current level toward $58 in the coming weeks. At $58-$60, another wild fall could happen if the diagonal completes. Diagonal patterns are famous for wild high momentum moves. This analysis will prepare you for what is expected of Crude Oil in the coming weeks, months and years. That's the power of the Elliott wave theory - modelling the past to forecast the future.
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